Vt. Senate Backs Higher Fuel Taxes

Montpelier — The Vermont Senate yesterday pulled back somewhat on a gasoline tax increase passed by the House, but has made up for that by increasing the diesel tax.

In an unusual move, the Senate gave its version of a transportation budget bill preliminary and final approval on the same day. Lawmakers said quick action was required because part of the gas tax increase is to take effect May 1 — in just 11 days.

Exactly how large increases in fuel taxes will be is still uncertain. The House passed a slightly larger gasoline tax increase than the Senate did, and no diesel tax increase. House Transportation Committee Chairman Patrick Brennan said he hoped the two chambers could concur after informal negotiations and not have to go to a conference committee to work out the differences between the two versions.

Remarks by senators that no one wants to increase taxes but Vermont’s roads are in rough shape and in need of repair were echoed later by customers and workers at the Gulf and Sunoco stations a half block east of the Statehouse.

“The roads are in rough shape but the gas tax is high enough,” said 37-year-old Fawn Buska of Barre, who was pumping gas into a Subaru at the Sunoco station.

Sue Steinberg of Montpelier said she drives around Washington County as a speech therapist and saw the same dilemma. “Unless there’s a way to get the underlying price of gas down, I don’t think we should raise it (the gasoline tax) higher,” she said. But she added, “the roads are in terrible shape.”

Lawmakers supporting the increases said they were needed in part so the state could raise matching funds for federal money that otherwise would be lost to Vermont.

But critics said the gasoline tax is regressive — the lower someone’s income is, the higher a share of it such a tax consumes.

“So many people have cut back on discretionary driving already,” Sen. Ann Cummings, D-Washington, said in summing up comments she had delivered earlier on the floor. “What they have left is necessary driving, going for groceries, going to the doctor.”

Vermont’s gasoline tax is a complex blend of one levy calculated in cents per gallon, a second levy for a fund dedicated to cleanups when underground fuel tanks leak and another levy to pay off money the state borrows for transportation projects by issuing bonds.

The bond levy is calculated in similar fashion to a sales tax, as a percentage on the dollar — it’s currently 2 percent, but both House and Senate versions of the bill would increase it.

Transportation Secretary Brian Searles said the combined taxes currently stand at about 26.6 cents per gallon. The House version would raise the gasoline tax by a projected 6.7 cents, depending on how underlying prices affect the sales-tax-like portion of the overall levy. Senators voted to raise it a projected 5.9 cents per gallon.

The administration of Gov. Peter Shumlin originally recommended an increase of about 8.6 cents per gallon.

“That was just a conversation starter,” Searles said. He said he would be satisfied with either the House or Senate version.